PRAGUE, May 17 (Reuters) - It is possible the Czech central bank could return to a normal monetary policy mode by raising interest rates from near zero in the second half of the year after letting the crown float freely last month, board member Tomas Nidetzky said on Wednesday.
The central bank abandoned a cap on the crown currency’s exchange rate on April 6, calling it the first step to tightening monetary conditions.
Nidetzky said policy would be determined by data and not time and said also it was clear rate rises would be gradual.
“It is possible in the second half (to start with a return to normal policy),” Nidetzky told Reuters on the sidelines of a parliamentary budget committee meeting.
”The economy is doing well, we will see how inflation will develop, we will see if the successful development, including the exchange rate, will continue. If conditions will be in place... we will start to return to standard monetary policy.
“Standard policy means raising interest rates.” (Reporting by Robert Muller; Writing by Jason Hovet)